Report: China Holds $3 Trillion in ‘Hidden Currency’

According to Brad Setser, a former U.S. trade and Treasury official, China currently holds a total of $6 trillion in its foreign exchange reserves. But half of those funds are not recorded in the official books of the central bank.

Instead, this money is stored by state commercial lenders and policy banks.

Setser says that the regime’s lack of transparency will eventually bring negative impacts to the rest of the world, given the size of its economy.

These reserves played a major role in the Belt and Road Initiative. The ambitious infrastructure program is known to help spread Beijing’s influence across the globe. Setser says that the regime’s efforts to diversify foreign exchange holdings helped develop the project.

The official number of China’s total reserves has remained static over the last few years. But the invisible amount has likely spiked along with China’s export surplus.

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